Polycab India Block Deal: Promoters Offload 2.74% Stake for Rs.2,716.5 Crore

Today, a crucial block deal involving Polycab India saw the sale of a 2.74% equity stake, amounting to Rs.2,716.5 crore. The specific identities of the buyers and sellers have remained undisclosed till now. However, according to the reports, Polycab’s promoters were likely behind the sale of part of their stake.

Details of the Deal

The block deal involved the exchange of 40.5 lakh shares (2.74% equity) worth Rs.2,716.5 at Rs.6,705 per share, which represents around a 4% discount from the previous closing price. Yesterday, Polycab India shares closed at Rs.6,998.6, having fallen by 2.9% during the trading session.

Stock Performance 

Polycab India has demonstrated a strong stock performance over the past year with an 87% surge, with its stock price nearly doubling. Year-to-date, the stock has surged over 24%, significantly outperforming the NSE Nifty 50 in both periods. As of the last quarterly update, the promoter group held 65.24% of Polycab India. However, this block deal reduces holding, as the promoters aim to monetize part of their stake.

Broker Recommendations

Earlier this week, several brokerage houses maintained a ‘buy’ rating on Polycab, raising the share price target to Rs.8,420, suggesting a potential upside of 20% from the previous close. The analysts highlighted Polycab’s market share gains in the organized cables and wires segment, now holding 25-26% in FY24. They also noted the company’s capital expenditure over the past five years, which has driven 30-40% domestic volume growth. Conversely, some brokerage houses maintained an ‘equal-weight’ rating on Polycab India, with a target price of Rs.7,310 per share.

Financial Highlights

In Q4FY24, Polycab India reported a 29% y-o-y increase in consolidated net profit, reaching Rs.553 crore, up from Rs.428 crore in Q4FY23. The company’s revenue from operations also saw a 29% y-O-Y rise, totaling Rs.5,592 crore in Q4 FY24, compared to Rs.4,324 crore in the corresponding period the previous year.

Conclusion: In conclusion, this block deal is a crucial liquidity event for Polycab India’s promoters, reducing their substantial stake in the company. With strong financial performance and positive broker recommendations, Polycab India continues to show potential for a bright tomorrow, despite the short-term impact of the stake sale.